Chart: Tiffany Bears Should Hang On As China Slowdown Weighs

Tiffany & Co. (NYSETIF) traded 10 percent lower on Wednesday on concerns about a slowdown in Chinese consumer spending.

The initial trigger was French luxury retailer Louis Vuitton (LVMH) missing analyst estimates, posting revenue of €11.4 billion versus €11.6 billion. With China’s economy slowing, Louis Vuitton’s results may have flared concerns about consumer spending.

As LVMH traded 9 percemt lower in Europe, the news hit Tiffany and others with exposure to the Chinese luxury retail space. This is based in part on low sales during the recent “Golden Week” holiday, during which sales were only 7 percent higher, the first time at less than 10 percent.

In reviewing the market cycles for Tiffany, it appears that the cycle began six weeks ago. Even though we are relatively early in this cycle, we can see that the stock has fallen below the price at which it began the cycle.

This is a failure that indicates a weak chart pattern. Our projection is for the stock to continue to fall to $104 by the end of the cycle in January.

Tiffany & Company Stock Chart with Weekly Bars

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